GHDI logo

Unemployment Reaches an All-Time High of over Five Million Jobless (March 1, 2005)

Under the Hartz IV reform, employable welfare recipients were counted among the registered unemployed for the first time. This change drove the unemployment level to over five million, leaving the media in uproar and the public in shock. The opposition attacked the government. Chancellor Schröder, however, maintained that his reforms needed time to yield positive results.

print version     return to document list previous document      next document

page 1 of 3

Record-Level Unemployment. Union Says: “A Catastrophic Day for Germany”

After unemployment reached an all-time high, the quarrel between the opposition and the government intensified.

The Union spoke of a “catastrophic day for Germany” and accused the red-green coalition of complete failure in economic and labor policy. In turn, the SPD warned the Union against “muddying the waters with its gloom-and-doom scenarios.” Economics minister Wolfgang Clement (SPD) is counting on a pronounced drop in unemployment in March. The present rise, he explained, is primarily attributable to the statistical effects of the Hartz IV reform.

Schröder: “Continue Implementing Reforms with Resolve”

Since December, under the Hartz IV reform, employable welfare recipients have been counted among the registered unemployed for the first time, and this, as Clement said on Tuesday, has caused the number of unemployed to grow by 360,000. “Without Hartz IV, unemployment would be around 4.85 million, or approximately what it was in January-February 1998.”

Chancellor Gerhard Schröder (SPD) talked about the depressing figures during his [recent] trip to Qatar, part of his Persian Gulf tour. “We need to have the backbone to continue implementing these reforms with resolve.” The important thing, he said, is to strengthen economic growth and lower labor costs.

FDP: Black Day in Germany

CDU chief Angela Merkel, on the other hand, accused the government of not doing anything. It is absolutely unacceptable, she said, “to sit around twiddling thumbs.” According to CDU labor market expert Karl-Josef Laumann, the Hartz legislation has failed. Instead of 2 million fewer jobless, as promised in 2002, there are now 1.3 million more. The government, he said, is consistently steering Germany off course. “The SPD and the Greens are cutting jobs on a grand scale and thus ultimately dismantling the welfare system.”

FDP labor market policy spokesman Dirk Niebel spoke of a black day in Germany. He believes that the country needs to loosen the labor and wage law and lower duties and taxes.

Greens: More Pressure on the Ground

According to Thea Dückert, deputy faction leader of the Greens, the options for placing and helping the unemployed have by no means been exhausted. “Especially in times of record-level unemployment, we need more pressure on the ground for the continued implementation of the Hartz reforms.”

Employers’ association president Dieter Hundt emphasized that business wants to preserve and create as many viable jobs in Germany as possible. But this can only happen, he said, when basic [business] conditions in Germany are clearly geared toward international competitiveness. “That’s the only way to give the labor market a boost and overcome the job crisis.”

first page < previous   |   next > last page